Baru Gold Corp. (TSX-V:BARU) told investors that a second mining contractor, PT. Putra Rimpulaeng Persada, has signed a contract to operate and produce gold at its Sangihe project in Indonesia.
The company noted in a statement that the owner and employees of the contractor are residents of Sangihe.
Under the terms of the deal, the contractor will pay Baru Gold the equivalent of C$330,000 for the right to operate across 7 hectares (ha), separate from the land allocation made to the first contractor. A non-refundable deposit of C$88,000 has already been paid, with half of the balance to be paid once the contractor starts carrying out activities and the remainder 30 days later.
The contractor is responsible for all operational, production and site remediation expenses and will receive 65% of the total gross receipts from the sale of gold recovered, while Baru Gold will receive the remaining 35%.
The contractor will restart an existing recently producing gold mine within the contracted area where equipment is already on site, land has been cleared, and construction completed.
Baru Gold highlighted that it maintains total control over the Sangihe project and that it will supervise all activities and co-process the gold. It will also be responsible for refining the gold and distributing the resulting funds, it said.
“This is our second local partner and further builds on the broad support we have to operate on Sangihe,” Baru Gold chairman and CEO Terry Filbert commented.
“Together, we are transforming unchecked, unsafe, and unlicensed mining into a regulated, monitored, and environmentally responsible industry that’s directly contributing to the local economy.”
Filbert added: “To date, we have allocated 22 of 65 ha to our local partners. For the Company, this now means we have two independent sources of gold production. For Sangihe residents, we have just helped create an additional form of badly needed local employment with safe working conditions.”
The company said it is negotiating with additional local partners to award the remaining 43 ha of land. It also plans to develop its own operations on Sangihe.
Baru Gold is a dynamic junior gold developer with NI 43-101 gold resources in Indonesia, one of the top 10 gold-producing countries in the world.